November 10, 2014 
The weekly roundup of Africa's Private Capital news


 

Here's the latest weekly digest of the most significant private equity, venture capital and infrastructure financing deals and investment news stories related to Africa over the last seven days.  We'd be delighted if you shared it with interested colleagues and/or partners, so please feel free to forward the newsletter on to them.  If they would like to receive their own weekly copy they're more than welcome to sign up here.  
 
We're trying to make this as useful a tool as possible for private capital market professionals focused on Africa.  Send tips, suggestions and feedback to me at acunningham@africacapitaldigest.com.

Many thanks for reading.
The week in  brief...

There were a number of private capital deals in Africa last week.  The deal that took most of the limelight last week was Actis' acquisition of a significant minority stake in Tekkie Town for $65 million.  With 265 stores in South Africa, 10 in Namibia and 1 in Lesotho, the fresh capital gives the shoe retailer the funds to expand more broadly in southern Africa and possibly West and East Africa too.  Terms of the deal have not been reported so far.  Meanwhile, in its eleventh transaction in its second fund, and its third outside of South Africa, Vantage Mezzanine has agreed to provide $30 million in expansion capital to Ghana's Surfline Communications. The capital will be used to expand the company's 4G LTE network as well as boost its product distribution and marketing activities. 

 

Egypt was a hot bed of deal activity last week.  In what must be the penultimate stage of a deal we've been following in the last couple of weeks, Abraaj formally offered to buy 100% of Egyptian cake and biscuit manufacturer Bisco Misr for approximately $118 million.  The per share offer price is lower than the closing price the day before the bid.  If you remember, in the prior week, shareholders owning 56% of the shares had offered to sell, dependent on submission of a formal offer.  It'll be interesting to see what happens next.  Either way, to do the deal, Abraaj will require a minimum stake of 51%. In two other potential deals, Pioneers Holdings has made an offer to acquire 60.2% of Arab Dairy for approximately $28 million, and TVM Capital Healthcare Partners has made an undisclosed offer to acquire stakes in Ameco Medical Industries.
 

Two recent industry reports feature in the sectors and strategies section of this week's digest.  Firstly, the GSMA's Mobile Outlook report for sub-saharan Africa. Business Day has an interesting piece on some of the data points from the report and how the technology will continue to improve country GDPs, employment and the lives of millions of people in Africa.  And fresh from presentation at one of their conferences in early October, KPMG Africa's report on the outlook for power in sub-saharan Africa became availabe for download from their website last week.  Links to both can be found in the abstracts below.  

 

And finally, a piece in Reuters on how, despite the alarming epidemic and security-threat headlines emanating from Africa in the last few months, most investors are looking past them to focus on the factors that gave rise to the 'Africa Rising' narrative and continuing to pursue investment opportunities on the continent.  A reassuring note to end this week's overview on.  

  

To find out more about these and other stories, please  scroll  down and review the headlines, abstracts and links to the original articles. 

Media Barter
Deal News...
Private Equity
Abraaj offers $118mln for 100% of Bisco Misr // reuters.com

As reported in last week's digest, shareholders holding 56% of Bisco Misr agreed to sell their shares to Abraaj Investment Management.  In response the investment company has now made a formal offer to acquire 100% of the Egyptian Bakery company for $118.88 million or 73.91 egyptian pounds per share.  In a statement, Abraaj said it would accept no less than a 51% controlling stake.

Private Equity
Actis spends $65mln for stake in Tekkie Town // bdlive.co.za

Private equity firm Actis is spending $65 million for a significant monority stake in South African shoe retailer, Tekkie Town.  The capital will be used to fuel the firm's growth plans for the southern african region as well as possible future expansion to West and East Africa.      

Private Equity
Vantage in $30mln expansion capital deal with Surfline // ventures-africa.com

In concert with a fund co-investor, Vantage Mezzanine has reached an agreement to provide $30 million of expansion capital to Ghana's Surfline Communications. The funds will be used to develop and expand Surfline's 4G LTE network in Ghana as well as to grow its product distribution and marketing network.  The deal represents Vantage's third outside South Africa and the eleventh transaction in its second fund.

Read more...

Private Equity
Pioneer Holdings offers to buy 60.2% of Arab Dairy // reuters.com

In a statement to Egypt's Stock Exchange last week, the country's Financial Supervisory Authority announced that investment company Pioneers Holdings has offered to buy 60.2% of Arab Dairy.  Reuters reports that the value of the offer is more than 200 million Egyptian pounds or $28 million.

Private Equity
Catalyst takes stake in Jamii Bora Bank // businessdailyafrica.com

Catalyst Principal Partners has taken a minority stake in Kenyan commercial bank, Jamii Bora.  The deal helps the bank raise its core capital and boost lending.  While terms of the deal were not disclosed, Catalyst normally targets deals in the $5 million to $20 million range.

Read more...

Private Equity
Marlow Capital buys Mailwise International // marlowsa.com

According to an announcement on their website, Marlow Capital, together with company management, has acquired South African bulk mail logistics firm Mailwise International. Terms of the deal have not been disclosed.  The capital will be used to grow revenues, expand services and enter new international markets in Africa and overseas.

Private Equity
TVM Capital Healthcare Partners bids for Ameco // zawya.com

TVM Capital Healthcare partners is launching a mandatory bid to acquire 100% of the the joint shareholding of Egypt-based Ameco Medical Industries currently owned by the National Bank of Egypt and Al Ahly Funds and Portfolio Management.  Terms of the deal were not disclosed.  The deal is TVM's first in Egypt.

Fund News...
Private Equity
Kuramo closes Africa Opportunity fund with $112.5mln 

Kuramo Capital Management has closed its Africa Opportunity Fund with commitments of $112.5 million from a diverse group of investors.  The fund of funds has the ability to make investments across multiple asset classes, including direct investments, to take advantage of the broader Africa opportunity.  Eaton Partners served as the sole placement agent for the fund.

DFI
IFC launches $450mln commercial financing initiative // allafrica.com
In a bid to support post-ebola epidemic recovery, the IFC has announced a package of $450 million in commercial financing to boost trade, investment and employment in Guinea, Liberia and Sierra Leone.  The package includes $250 million in rapid response projects and a further $200 million for investment projects to support the post-epidemic economic revival.  
DFI
Norway invests $44mln in Green Africa Power fund // africanbrains.net
At a conference last week, Norway's Foreign Minister announced a $44 million investment in the Green Africa Power Fund. The fund was established to encourage private sector investment in sub-saharan renewable energy development.  
DFI
PROPARCO injects 24mln euros to boost SME lending // mfw4a.org

PROPARCO has granted Kenya's Diamond Bank a 24 million euro loan to boost lending to small and medium enterprises.  The credit line will enable the bank to further broaden its customer base and offering to the SME market.

Projects & Portfolio Companies...
Infrastructure
Lake Turkhana Wind Power Project begins construction // ventures-africa.com

The construction phase for Africa's largest planned wind farm, the Lake Turkhana Wind Power project in northern Kenya, has begun.  Once complete, the farm will deliver 300MW of electricity to Kenya's national grid.  In March this year, Ventures Africa reported $870 million in equity and debt agreements were signed with a diverse range of backers including KP&P, Finnfund, Denmark's IFU, Norfund and others. Project completion is slated for the first quarter of 2017.

Read more...


c. TEkkie Town
Actis spend $65 million for a stake in South Africa's Tekkie Town
Image Credit: Tekkie Town              
Sectors & Strategies...
Agriculture
Chi Farms sale show appetite for african food assets still strong // ft.com
According to people familiar with talks, both blue chip multinationals and global private equity firms are expressing interest in the planned sale of Nigeria's leading beverage company, Chi Farms.  The sale would be the latest in a series of multi-million dollar deals in African food and beverage companies in the last few months, showing investor appetite in the sector remains buoyant.
Consumer
Anticipated rise in deals for consumer-facing companies // afkinsider.com
According to some, Africa may be on the brink of a wave of consumer-facing deals in sectors such as fast-moving consumer goods, consumer financial services, education and healthcare as more and more companies reach a size that is interesting to international and local investors.  The challenges peculiar to Africa in terms of deal execution and integration are many, however.
Mobile
9 data points to contextualize Africa's thriving mobile landscape // bdlive.co.za

A good piece looking some interesting data points taken from the GSMA's latest report, The Mobile Economy | Sub Saharan Africa, on how the technology will continue to boost GDP, employment and improve the lot of millions of people.  

Read more...

Power
KPMG publishes sub-saharan power outlook report // kpmg.com
Published by KPMG Africa's Infrastructure and Major Projects group, the second edition of the Sub-Saharan Africa Power Outlook report is now available for download from the company's website.  Originally presented at its Global Power and Utilities Conference in early October, the report takes a look at the sector and its evolving trends.
Perspectives & Trends...
Perspectives - Private Equity
Investors ignore Africa's headlines and stay on course // reuters.com
Weakening commodity prices, the ebola epidemic and multiple terrorism-related news stories may have been hogging the headlines coming out of Africa recently, but investors are still excited by the region's overall growth narrative and other positive developments on the ground.  An interesting piece on the key factors anchoring the 'Africa Rising' investment thesis.
Trends - Private Equity
Tanzania rolls out private equity welcome mat // dailynews.co.tz
At a conference in Dar es Salaam last week, the country's Vice President announced the government's support for developing private equity and venture capital investment in the country.  To date, according to the conference sponsor Tanzania Private Sector Foundation, $7 billion of private equity investment commitments have been made in the country's companies.
Companies, People & Profiles...
Company News
Merger delivers ENS Africa expansion to Namibia // thelawyer.com

In merging with 11-partner firm Lorentz Angula, Africa's largest law firm, ENS Africa, is adding two new offices to its network.  Namibia becomes the sixth jurisdiction in which ENS operates following a number of mergers in 2012 and 2013.

Read more...

Company News
Dentons launches Casablanca office with raid on UGGC // thelawyer.com

Dentons is opening a permanent office in Morocco following the hire of two partners from French firm UGGC & Associes.  Patrick Larrive and Christophe Simmonet will be supported by a team of five associates.

Read more...

People Moves
GEPF dismisses Oliphant from role of Principal Executive Officer // bdlive.co.za
The Principal Executive Officer of South Africa's state pension fund, John Oliphant, has been dismissed following a year-long disciplinary inquiry.  The Government Employees Pension Fund made the announcement last week.  With more than R1 trillion in assets under management, the fund is the largest investor in South Africa.  Mr. Oliphant's lawyer announced that the decision would be appealed.
People News
Adeosun appointed to new US President's Advisory Council // avca-africa.org
Kuramo Capital Management's founder and Chief Investment Officer, Wale Adeosun, has been appointed to the newly established US President's Advisory Council on Doing Business in Africa.  He is one of fifteen private sector business leaders selected to advise the President on strengthening commercial ties between the US and Africa.
Profile
Jacqueline Novogratz, founder and CEO of impact investor Acumen // ft.com

An interesting, if short, profile of Jacqueline Novogratz who launched Acumen on 2001. 

Read more...

Current Job Postings...
Chief Investment Officer for international DFI 

Based in Gabarone, Botswana 

Read more...

Fund of Funds Investment Manager for CDC 

Based in London, UK 

Read more...

Investment Manager, Africa Funds at DFI  

Based in London, UK 

Read more...

Investment Officer at Kinyeti Venture Capital 

Based in Juba, South Sudan 

Read more...

Head, Distressed Debt for mid-market African bank 

Based in South Africa 

Read more...

Head, Operations & IR at Accion's Frontier Investment Group 

Based in Washington, DC, USA 

Read more...

Infrastructure Analyst at Old Mutual Alternative Investments 

Based in Cape Town, South Africa 

Read more...

In-House M&A/Corporate Strategy Director 

Based in London, UK 

Read more...

New to AfCD this week
Investment Director, Pan-African Investment Fund  

Based in London, UK 

Read more...

Upcoming Conferences...

A record turn-out of over 550 private equity professionals expected with 120+ local and international LPs including: Public Investment Corporation, Grinnell College, Public Service Pensions Fund, Gatsby Charitable Foundation, Los Angeles County Employees Retirement Association, GIC Special Investments, The Church Pension Fund and many more... 10% discount - please quote VIP code: FKR2356ACDWB:

SuperReturnAfrica.com...

Africa Investment Exchange; Energy 

London, November 24th to November 25th, 2014 

Read more...

Africa Inbound 2014 

London, November 25th, 2014 

Read more...

2015 SAVCA Annual Private Equity Conference 

Stellenbosch, February 12th to February 13th, 2014 

Read more...

Global Private Equity Conference 

Washington, DC, May 11th to May 14th, 2015 

Read more...

Africa Financial Services Investment Conference 

Brighton, May 12th to May 15th, 2015 

Read more...

And finally...
We hope you found the digest to be a useful summary of the major happenings in Africa's private capital markets last week.  We'd love it if you shared it with colleagues and business partners.  They can sign up for free here.  

Best wishes for a productive week - if you have any tips, suggestions, questions or comments, please get in touch.

All the best,
 
- Allan
 
Allan Cunningham
Editor & Publisher
AfCD | Africa Capital Digest

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